Vista Equity Partners Buys Marketo for $1.8 Billion in Cash; Pips out Microsoft, SAP

Vista Equity Partners Buys Marketo for $1.8 Billion in Cash; Pips out Microsoft, SAP

Vista Equity Partners, a leading private equity firm, has acquired its contemporary in the marketing automation industry for a whopping $1.88 billion in cash. Marketo will now feature Vista Equity Partners as its owner.  Founded in 2006, Marketo went public in May 2013. And in May 2016, it has agreed to go private again.

Vista Equity Partners successfully made an ‘all-cash’ offer to Marketo, thus putting an end to weeks of speculation about the company being acquired by Microsoft. Earlier, the tech giant was believed to be running as a leader to acquire Marketo owing to its partner status. SAP was also named one of the probable buyers as per market speculations. However, Vista Equity Partners’ reputation of acquiring software and technology-enabled businesses in the past seemingly inspired Marketo management to agree to the “all in cash” deal.

The speculations about Microsoft or SAP being potential buyers stemmed from the fact that these technology giants were trying to make a possible move into the marketing sphere. This acquisition, had it happened, would have given these tech giants an edge over competitors like Adobe and Oracle, among others. By being acquired by a PE firm, all these speculations have been put to rest, for now.

This is not the first billion-dollar acquisition for Vista Equity Partners. In May 2013, it acquired computer security software Websense for $1 billion. Websense has since been renamed Forcepoint. In September 2014, it also bought out TIBCO Software Inc. for $4.3 billion. The juggernaut is still rolling for the private equity firm as it is set to purchase Infoblox in another billion dollar proposition.

Marketo shareholders will receive purchase notes of $35.25 in cash for each share. This price represents a 64% premium applied on the unaffected closing price, as on May 9, 2016. The acquisition won’t hamper Marketo’s growth in future. It will remain an independent category leader driving product innovation and thought leadership for the entire digital marketing industry. The focus will be to give tomorrow’s marketers and the C-suite an ultra-high-scale enterprise platform for customer engagement.

The Marketo-Vista deal is expected to close in Q3, 2016.

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